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Colombia Under Real Threat?

Venezuelan migrants line up for free meals in Cucuta, Colombia. Credit: miamiherald

As the Venezuela immigration crisis continues, surrounding countries bear the burden and the resulting effects. Colombia, in particular, worries that the influx of one million refugees from Venezuela will destabilize not only their economy, but also their hard won democracy.

From an economic standpoint, Colombian President Ivan Duque stated that the influx of migrants has cost Colombia 0.5 percent of its GDP, and that this would have repercussions on health care, education, infrastructure, and public assets. For instance, many immigrants are fleeing Venezuela’s collapsing health care system. Their dire health needs have major implications on Colombia’s health care costs.

World Bank Vice President speaks with Colombian president on economic steps going forward. Taken Sept., 2018. Credit: Reuters

While some of these political and economic concerns are valid, the recent World Bank report demonstrates that if handled properly, the effects can be controlled. In the short term, “the increased demand for jobs affects the level of employment, its quality and wages.” This creates “tension between the local population and Venezuelan migrants due to the competition for resources which are already scarce.”

In the long term, however, “Colombia could see greater economic growth as a result of this migration.” In fact, this could lead to a long term boost in GDP of approximately 0.2 percent, as long as it incorporates the migrants into the labor force and quickly mitigates problems “that could turn into poverty traps.”

The World Bank advises quick action to help immigrants assimilate and become productive members of society. As of now, Venezuelan migrants are twice as likely to be unemployed compared to locals, half are living under the poverty line, and 40 percent of children are not going to school (compared to 20 percent of Colombian children).

More optimistic views of the long term effects follow recent studies that migrant workers have modest to no effect on employment and wages of the local workforce. However, in the short run, there will be effects on government spending, crime flows, and employment that could have noticeable effects for the economy and the attitudes of Colombian citizens.